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Household spending in 2006 continued to show the effects of the strong resource economy in the West. Spending growth in Alberta surpassed all other provinces by a wide margin.

On average, each Canadian household spent $48,770 on goods and services, up 4.6% from 2005. This was above the inflation rate of 2.0% as measured by the Consumer Price Index.

Average household spending in Alberta for goods and services increased by 14% over 2005 to $59,740, the largest year-over-year increase for one province ever recorded by this survey. Prince Edward Island showed the second largest growth (+8%) from the previous year. Saskatchewan and Québec also reported growth above the national average.

The slowest growth in spending on goods and services was in Manitoba, where it rose by only 1%, and in Ontario where this figure grew by just under 2%.

In 2006 Newfoundland and Labrador still reported the lowest average household spending on goods and services, $39,520.

Basics still account for largest shares

The largest shares of Canadian household budgets were for personal taxes (20%), shelter (19%) and transportation (14%).

Personal taxes increased slightly to an average of $13,630. However, at 20% of the average household budget this represented the lowest share since the 1992 survey.

Spending on shelter rose 5% to an average of $12,990, largely the result of increases in spending of 14% in Alberta, 7% in Saskatchewan, and 6% in British Columbia. Shelter costs in Alberta rose by 10% in 2006, according to the Consumer Price Index.

Renters spent 10% more on rent than the previous year, or $2,670 per household.

Household spending on transportation rose 4% at the national level, to an average of $9,240, but at the provincial level, trends varied widely. Households in Alberta spent an average of $12,160 on transportation, up 19% from 2005. Spending on vehicle purchases alone was up 22% over the previous year in this province.

Spending for purchases of vehicles was up 12% in British Columbia and 10% in both Québec and Newfoundland and Labrador, while Ontario households reported 10% less spending for vehicles. The proportion of Ontarians buying vehicles in 2006 was similar to previous years, but the average amount spent per purchase was down. Although the price of gasoline rose 5% in Ontario, average spending for fuel dropped 1%.

Canadians used public transportation more in 2006, with spending increasing 17% to $970. Most of this was for air travel, which increased by 22% to $530 per household. Spending for city commuter bus, subway and other means of public transport rose by 11% to $220.

Spending on traveller’s accommodation increased by 19% to $650 and on hotels and motels by 34% to $490. Households spent more on food while on trips which increased by 55% to $130.

Spending on clothing increased a strong 13% to an average of $2,870 in 2006. Canadians also spent 9% more on household furnishings, raising the average to $2,130.

Households spent $935 on household equipment including appliances, an increase of 12%. They purchased fewer recreational vehicles, spending an average of $370, down 16% from 2005.

Spending on childcare expenses increased 14% over 2005 to $330 per household.

Households spent slightly more on food, with the average increasing from $6,980 in 2005 to $7,050 in 2006. However, as a proportion of total spending it was the lowest ever. In the 1960s, food represented the largest proportion of household expenditure, accounting for nearly 19% of total spending. However, this proportion has declined constantly since then to just over 10% of total spending in 2006.

Wireless communication takes a bigger share

Household spending on cell phone and other wireless services was up more than 18% from 2005, to an average of $470. At the same time, spending for conventional landline telephone service continued to fall, dropping 3% to $650.

Over two-thirds (68%) of households reported owning at least one cell phone, up from 64% the previous year. One in five households reported owning two cell phones, while one in ten households had three or more.

Some 644,000 households, or one in twenty of the total, reported they used cell phones only and had no conventional land-line phone. Of these, nearly 80% were renters, and 60% were one person households.

Households in Alberta reported the highest spending on communications, $1,900, up 15% from the previous year.

Calgary was the most wireless city, with 87% of households having a cell phone. Households in Calgary spent $750 on average on cell phones in 2006, more than they did on conventional phone lines ($700).

The lowest average spending on communications, $1,120 was in Québec, which also continued to report the lowest rate of cell phone ownership. Only 56% of Québec households owned a cell phone.

Record number of households bought new computer hardware

A record 31% of households reported buying new computer hardware, although average spending remained unchanged at $290 per household. Computer equipment prices fell by 17.5% in 2006, according to the Consumer Price Index.

More than three-quarters of all households reported owning a computer in 2006. Nearly 97% of the highest income households had a computer, and 93% had Internet access from home. In comparison, 45% of households in the lowest income group had a computer, and one-third had home access to the Internet.

Average spending on Internet access services rose 12% in 2006 to $270. This was in part the result of a 6% increase in households with home Internet access (to 68%) combined with a 14% increase in households with high-speed service. Only one in ten households still reported using dial-up service.

Entertainment: Ownership of DVD players surpass VCRs for first time

Households spent 38% more in 2006 on new audio equipment, such as digital music players, and 16% more on new video equipment, including big-screen TVs. For the first time more households reported owning a DVD player (83%) than a VCR (82%).

While spending on digital cameras grew 6%, spending for conventional cameras declined by 29%, and that for film and processing was down 8%.

Spending on movies, the most common entertainment service fell 8% to $97 per household.

Spending on reading materials decreased 5% to $260 per household. Spending on newspapers declined 7%, while expenditures for periodicals and magazines dropped 10%. Alberta households bucked this trend, spending 8% more on reading materials than in 2005. PEI households were the biggest newspaper buyers, spending an average of $114 per year.

Alberta households reported the highest spending in nearly every entertainment category. On average, they spent $150 for live performing arts (+28%); $120 on live sports (+81%); $210 on audio equipment (+37%); and $470 on video equipment (+65%).

Health care up, tobacco products down

Health care accounted for $1,870 from the average household budget last year, a 6% gain from 2005.

This was the result of an 11% increase in reported out-of-pocket spending for pharmaceutical products.

Households in Alberta reported the highest average spending on health care, at $2,440, of which $1530 was for direct healthcare costs, an increase of 26% from 2005. The second highest spending was in British Columbia, at $2,180.

Households in Quebec reported an average spending of $530 on private health care plans, an increase of 19%. They also spent $780 on health insurance premiums which was an increase of 10%. In Ontario households spent an average of $420 on medicinal and pharmaceutical products, an increase of 14% from 2005. They also spent $143 on average on health care practitioners other than physicians which was higher than 2005 by 31%.

Canadian households spent $610 on tobacco products in 2006, about the same as in 2005, but 25% less than the peak of $815 reported in 1992. Using 2001 prices, households in 1969 spent the equivalent of $1,400 a year on tobacco products. Households spent $870 on alcoholic beverages in 2006, an increase of 9% from 2005. This was mainly due to an increase in spending on alcoholic beverages served on licensed premises.

Net spending on games of chance was down 5% to $260. The decline occurred in non-government bingos and raffle tickets.

Canadian households spent an average of $540 on life insurance premiums, 17% more than 2005. Quebec households spent an average of $660 on life insurance premiums, 10% higher than 2005 and the highest figure in the country.

Average spending on contributions to charity for households in Canada was $570, an increase of 10% from 2005. The highest average contributions were made in Alberta, at $900 while the lowest spending was in Quebec, an average of $180 per household.

Food, shelter, clothing account for over half of spending by lowest income households

The one-fifth of Canadian households with the lowest income spent about $23,780 in 2006. Of this, almost 50% went to food, shelter and clothing. Personal income taxes claimed 3% of their budget.

In contrast, the top fifth of households spent an average of $137,820 in 2006. They allocated about 28% of their budget to food, shelter and clothing, while 29% went to personal income taxes.

These proportions were similar to 2005.